In a unanimous decision of the full court, rendered on June 10, 2005, the Supreme Court dismissed the plaintiffs’ appeal.
Following the partial wind-up of the Stelco pension plan, the appellants, a group of former Stelco employees from Quebec, argued that they were entitled to grow-in benefits under section 74 of the Ontario Pension Benefits Act, which expressly limits its application to ‘members in Ontario’. The Quebec employees based their claim on the choice of law clause in the pension plan designating Ontario law as the applicable law, arguing that it entitled them to all of the benefits under the Pension Benefits Act, including those set out in section 74. Under the Memorandum of Reciprocal Agreement, which regulates the administration of pension plans covering employees in more than one province, the partial wind-up was overseen by the Ontario pension authority. Rather than contesting the decision of the Superintendent of Pensions of Ontario approving the partial wind-up report, the Quebec employees brought a parallel action against Stelco in the Quebec Superior Court, claiming approximately $500,000 in additional pension benefits. In addition, the cost of potential liabilities towards other employees and the additional amounts that would have been necessary to fund the pension plan would have amounted to several hundred thousand dollars.
Although the written judgment of the Court is yet to be released, this will undoubtedly be an important decision in Canadian law with respect to the operation of multi-province pension plans.
This is also a significant development in Canadian private international law and administrative law, as it is the first time that the Supreme Court of Canada has considered the effects of a choice of law clause in this context and the deference owed by the courts of one province to the decisions of administrative bodies rendered in another province.
Stelco was represented by McCarthy Tétrault LLP with a team led by Chantal Masse (litigation), who was assisted by Rachel Ravary (labour and employment) and Alexandre-Philippe Avard (litigation). Timothé Huot and Gregory Winfield (pension and benefits) of McCarthys were involved as counsel.
The appellants were represented by Claude Tardif, Gaétan Lévesque and Stéphane Forest of Rivest Schmidt in Montreal. The Superintendent of Financial Services, represented by Deborah McPhail, was granted leave to intervene in the appeal to argue that the additional pension benefits were not payable and that the Quebec courts should have declined jurisdiction.